Thursday, April 21, 2011

Mattel loses Bratz battle, must pay millions

Hey everyone out there in doll and craft land. I found this article online, and I've copied and pasted it here as information that you might all be interested in reading and knowing about. The Mattel vs. MGA battle has been going on for years, and it seems it now over after a long battle. Enjoy!  This is the link where I found this article, and there is also a video
there if you care to check it out. 

"Barbie maker Mattel (MAT) got smacked down by a federal jury today, and was ordered to pay $88.5 million to rival MGA Entertainment in a dispute over the Bratz line.

In what's being called a stunning decision, the jury told Mattel that it does not own the Bratz dolls. The legal battle has been going since 2004, and one analyst said today that Mattel's failure to settle was a "tremendously bad decision" by management.

"It means they wasted $400 million or so of shareholder money to get zero return," the analyst told Reuters. Mattel shares dropped nearly 3% after the verdict, but later recovered to $26.68, down less than 1%.

At the heart of the case is Mattel's claim that Bratz creator Carter Bryant came up with the idea for the dolls while he was working at Mattel. Mattel also says MGA secretly conspired with Bryant to steal the idea. MGA countered that the Bratz concept came to Bryant while he was on an eight-month hiatus from Mattel.

The verdict was a momentous victory for MGA after a prolonged legal scuffle that turned ugly. Mattel executives had described a "rival-led Barbie genocide" in one internal memo, according to The Associated Press. "This is war and sides must be taken: Barbie stands for good. All others stand for evil," the memo read.

MGA's chief executive, Isaac Larian, wept as the verdict was read while Mattel's chief executive leaned back in his chair and rubbed his forehead with his hand, The Los Angeles Times reports. "It very well shows that in America, even huge corporations are not above the law," Larian told Reuters.

The whole thing may sound a little silly, but there are billions at stake. MGA has sold more than $3.3 billion in Bratz products since the dolls debuted, reaping nearly $300 million in profits, the AP reported. Barbie profits sank by nearly $400 million in that period.

The jury's decision was a complete turnaround from the first trial between the companies, in 2008. At that time, a jury awarded Mattel $100 million in damages and told MGA to hand the Bratz line over to Mattel. But that jury verdict was overturned last year, and the issue went to federal court.

Now, the question is whether the Bratz dolls have survived all the years of turmoil. The legal issue made some retailers uneasy about committing to sell Bratz, and the fashion-doll category has changed over the years, the Los Angeles Times reports.

"Mattel killed the Bratz brand," MGA's Larian said. "It will never be the same level it was before."

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